IAASB releases IAS 1 guidance; EU adopts sustainability directive

Read a roundup of the latest developments in corporate reporting, including an update on IFRS 17.

The International Auditing and Assurance Standards Board (IAASB) has published new guidance to help users understand the impact on the International Standards on Auditing (ISAs) due to narrow-scope amendments made to IAS 1, Presentation of Financial Statements, an IAASB news release said.

The guidance "considers financial reporting framework developments that may affect the ISAs, such as changes to the International Financial Reporting Standards (IFRS)."

This includes understanding the effect of these amendments on the entity's financial reporting process as well as the related impact on the auditor's report, the publication said.

IFRS 17 about to become mandatory in UK

The accounting standard IFRS 17, Insurance Contracts, will become mandatory for UK companies reporting under international standards for accounting periods beginning on or after 1 January 2023, the UK government announced in a policy paper.

"These regulations mitigate the tax consequences of the accountancy change by spreading over 10 years certain amounts that would otherwise be subject to corporation tax immediately on the adoption of IFRS 17," the publication said.

New EU sustainability standards

The Corporate Sustainability Reporting Directive (CSRD), adopted by European Parliament recently,  will "make businesses more publicly accountable by obliging them to regularly disclose information on their societal and environmental impact," according to a Parliament news release.

The Council is expected to adopt the proposal on 28 November, and the rules will start applying between 2024 and 2028.

Small- and medium-size entities in Europe will also be subject to the rules under the CSRD from 1 January 2026, with reports due in 2027, unless they opt-out until 2028, the news release said.

UK FCA's new greenwashing measures

The UK's Financial Conduct Authority (FCA) has proposed new packaging measures and a more general anti-greenwashing rule covering all regulated firms, an FCA news release said.

The proposals include sustainable investment labels to help consumers navigate the investment product landscape and enhance consumer trust, an FCA consultation paper said.

The FCA intends to publish the final rules by the end of the first half of 2023.

Nigeria to adopt IFRS Sustainability Disclosure Standards

The Financial Reporting Council of Nigeria announced at COP27, the United Nations' climate change summit, that it will move to adopt the International Sustainability Standards Board's (ISSB) IFRS Sustainability Disclosure Standards in Nigeria when they are issued in 2023, an IFRS news release said.

"Earlier this year, African finance ministers announced their support for the work of the ISSB, citing that early adoption by African jurisdictions and companies has the potential to attract more investment and to boost private sector development in Africa," ISSB Chair Emmanuel Faber said. "The announcement by Nigeria is yet a further signal of the momentum behind the ISSB's objective to deliver a common language for sustainability-related disclosures worldwide."

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